Written Commentary
CORN
Prices were up $.01 in volatile 2 sided trading session. Spreads were mixed and little changed. Market bulls remain hopeful Trump’s post stating China is considering “the purchase of additional agricultural products” may include corn at some point. Prices remain rangebound between $4.15-$4.40. The USDA did announce a flash sale of 130.5k mt (5 mil. bu.) of corn to an unknown buyer. Ethanol production plunged to 956 tbd, or 281 mil. gallons last week, down from 327.5 mil. gallons the previous week. Production was within the wide range of expectations driven by the frigid outbreak across the US Midwest. Production was down 14% vs. YA. There was 95 mil. bu. used in the production process, or 13.54 mil. bu. per day, well below the 15.36 needed to reach the USDA forecast of 5.6 bil. Ethanol stocks slipped to 25.1 mil. barrels, well below YA stocks at 26.4 mb. USDA Feb-26 WASDE report next Tues. Lowered FOB offers from Argentina will start cutting into US exports. Brazilian ethanol producer Inpasa will ship its 1st cargo of DDG’s to China next week. Tomorrow export sales are expected to range between 32-80 mil. bu.
SOYBEANS
Prices surged across the complex with beans up $.08 on new crop, $.27 on old, meal was $4 higher while oil was up over $.01 lb. Mch-26 beans traded to a 2 month high on heavy speculative buying following a mid-morning social media post from Pres. Trump summarizing his “excellent telephone conversation” with Chinese leader Xi. During their conversation Trump claimed China would up their 25/26 soybean purchases from the US to 20 mmt, up from their current total of 12 mmt. Also reiterating their intent to purchase 25 mmt for next season. The $11.05 area represents a 50% retracement between the November high and the January low and perhaps a price we may level off at. Mch-26 oil surged to its highest level since Aug-25 with next resistance at 56.11. Mch-26 meal stalled near its 50/100 MA’s just above $303. Spot board crush margins slipped $.04 ½ to $1.70 ½ bu. while bean oil PV registered a fresh 5 month high at 48.4%. Most Brazilian production forecasts are landing above 181 mmt, vs. the USDA forecast of 178 mmt in Jan-26. WASDE report, however now settling on no change. Instead of looking for a 25-50 mil. bu. export cut, we could now be looking at a 25-50 mil. bu. increase. Exports are expected to range from 15-55 mil. bu. of beans, 0-25k tons of oil and 250-500k tons of meal.
WHEAT
Prices largely shrugged off Pres. Trump’s statement closing $.02-$.04 lower. CGO Mch-26 continues to chop around between its 50 and 100 day MA. KC Mch-26 has MA support just above $5.26. Both the 6-10 and 8-14 day outlooks show above normal precipitation for the major winter wheat producing areas. After not making any wheat purchase yesterday, Jordan issued a new 120k mt tender that expires next Tues. Feb. 10th. Frigid cold in E. Europe and Russia isn’t expected to have impacted their winter wheat crop as snow cover likely provided adequate insulation. Tomorrow’s export sales are expected to range from 10-20 mil. bu.
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